Shanghai FTZ launches pilot program to upgrade free trade account system

The pilot program to upgrade the functions of the free trade account system in the China (Shanghai) Pilot Free Trade Zone officially took effect on Friday, marking a new step forward in the liberalization and facilitation of cross-border trade and investment.

The People's Bank of China Shanghai Head Office started implementing the interim measures for upgrading free trade account functions in the Shanghai FTZ on Friday, launching the pilot upgrade of Shanghai's free trade account system.

PBOC Governor Pan Gongsheng announced at the 2025 Lujiazui Forum in June that eight policy measures will be introduced in Shanghai, including the optimization and upgrade of the FTA functions.

With the launch of the pilot program for upgrading FTA functions, the system will be aligned more fully with high-standard international trade and investment rules.

Banks participating in the program can directly process fund transfers — based on settlement instructions from pilot enterprises — between upgraded FTAs and overseas accounts, offshore accounts, onshore accounts of offshore institutions, multifunctional FTAs, and FTAs opened by non-residents.

Corporate participants conducting capital-account transactions other than securities investment are exempt from cross-border financing quotas, overseas lending limits, and related approval requirements, nor will they need to complete prior registration, filing or special-account setup with China's foreign exchange regulators.

Transfers of renminbi funds between upgraded FTAs and non-FTA accounts under the same name will be included in macro-prudential quota management in accordance with PBOC requirements.

As one of the first foreign banks allowed to participate in the pilot program, HSBC China successfully opened an upgraded FTA for a multinational enterprise in the Shanghai FTZ.

"As the latest step in China's high-level financial opening, this pilot not only adds new functions to FTAs but will also generate a multiplier effect for the liberalization and facilitation of cross-border trade and investment," Zeng Su, managing director of HSBC China's global payments solutions, said.

"For companies, it will significantly enhance the efficiency of capital-account fund allocation, enabling domestic and overseas funds to engage in more efficient settlement, financing and circulation to support the real economy," Zeng said.

After opening the account for the client, HSBC China will further explore the use of upgraded FTAs as a platform for financial service facilitation and innovation, better supporting enterprises' cross-border trade and investment needs.

Citibank (China) Co Ltd also successfully opened upgraded FTAs for four corporate clients.

Zhang Wenjie, Citi country officer and banking head for China, said, "The Shanghai FTZ has always been at the forefront of China's financial reforms. The latest upgrade to the FTA system will further improve the efficiency and convenience of cross-border financial services in the FTZ."

Citibank (China) said it assisted clients in completing the upgraded account setup on the very first day the new policy took effect, demonstrating the bank's support for China's opening-up of its financial sector and the bank's long-term commitment to financial innovation in the Shanghai FTZ. Citibank (China) aims to provide more flexible and efficient cross-border financial solutions to support the global operations of multinational and Chinese enterprises.

jiangxueqing@chinadaily.com.cn